The figurines--optional in regular D&D but great tools here--are "tagged" with dot codes on the bottom. The Surface is able to use its tiny cameras to view these unique codes and determine which character is where on the game grid. This means the game can automatically determine line-of-fire angles and keep track of enemy health.
This really speeds things up. A combat round in traditional D&D can take awhile. Initiative, roll-to-hit, damage, movement, and everything else has to be calculated. The program on the Surface automates all of this. Instead of several minutes, the combat round we tried (in which we killed a couple of weak orcs) took only a minute or two. And it was more fun.
The Dungeon Master (yes, you still need one) uses a PC networked with the Surface to control the game and the environment. All of the functions a DM fills in the traditional game, from generating monsters to mapping caverns, are available here. As a DM, I've always wanted to draw the game map dynamically.